India:
India's Draft Space Law: Opening Up The Final Frontier?

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1. INTRODUCTION

At the end of November, India's Space Research Organisation
(the "ISRO") launched a primary
observation satellite and deployed another 30 international
co-passengers, commercial satellites belonging to 8 different
countries. Clearly, the sky is no longer the limit and the venture
into space for technological and economic development, is perhaps
the cutting-edge question in science at the moment,
spawning a number of new industries in the coming decades.

While traditionally, space has always been the exclusive domain
of the public sector, the final frontier is gradually
opening up to the private sector as technology increasingly enables
and empowers private companies with the ability to put things into
orbit (and perhaps beyond) for the purpose of providing services on
a commercial basis. While it is telecommunications and geo-mapping
services today, tomorrow, it could be mining or even far more
exotic activities, that was once the exclusive realm of science
fiction.

In fact, the private sector race into space has long been on,
with Elon Musk's Space X pioneering reusable launch
technology, Richard Branson's vision of putting tourists into
space and even Bangalore based Team Indus recently taking
up the Google challenge of putting a space rover on the moon. It is
in this broader context that India's Department of Space (the
"DoS") published a draft bill, the Space
Activities 2017 Bill (the "Bill") for
stakeholder comment just over a year ago.1

With all these developments, questions about how access
to space will be regulated and will it be done in a manner that
facilitates private sector investment are absolutely critical.
While government has a legitimate concern in regulating what goes
into space, it is equally important that the industry is not overly
regulated, which could potentially deter investment, or otherwise,
drive investment into other jurisdictions having a more flexible
regulatory landscape.

Does the Bill serve to provide a robust framework for the future,
meeting these objectives? This article will highlight briefly
recent developments in India's space program, summarize the
international legal framework governing space before exploring the
contents of the Bill and consider to what extent it is likely to
encourage investment into this sector on the one hand; while
recognizing the legitimate public interest concerns of the state,
on the other.

2. INDIA's SPACE PROGRAM

One of India's great success stories, is perhaps its ability
to develop its own satellites, launching systems and ground control
technology to put not just Indian satellites into space, but so
too, other satellites on a commercial basis. In February 2017, the
ISRO reached a record milestone, launching 104 satellites from
single payload.2 To add to the vision, earlier this
year, Indian Prime Minister Narendra Modi announced India's
intention to put a man on the moon by 2022.3

The ISRO has been at the forefront of driving this industry,
enabling a number of services encompassing navigation and
communications to imagery, facilitating a number of social and
economic programs over the last 50 years.4

It successfully launched a lunar orbiter in 2008 and plans to
launch a further unmanned mission to the moon in the first quarter
of 2019.5 But perhaps the apex of ISRO's achievement
to date however, is putting an orbiter around Mars on its very
first attempt, back in September 2014, a mission that still
continues today, more than four years later.6 The cost?
Just USD 74 million, a fraction of the cost of its foreign
competitors.7

3. INDUSTRY ISSUES

There are several ways of looking at the space industry and
broadly, we can think of it in the context of the following
headings. Firstly, how should we regulate what goes up
there in the first place? Secondly, who should be able to
put things into space? Thirdly, how do we put things into
space, and what regulatory framework should govern it?

Critically, any regulatory framework governing this sector will
have to consider what happens if things go wrong; and generally, if
things go wrong, it's likely to go fantastically wrong. Who
takes the risk on a satellite launch and what happens if the rocket
blows up after leaving the launch pad? Alternatively, what happens
in the event that objects in space collide and who takes
responsibility for objects that could come crashing back down to
earth?

But also, there are other pertinent questions in relation to
who owns the intellectual property in relation to public
private partnerships, relating to what goes up into space (or what
otherwise might be made in space in the future) and the revenues
that derive from operation.

4. INTERNATIONAL LAW

The international system already has quite a lot of space law
governing what it can be used for and what happens if things go
wrong. The principle of using space in good faith for
peaceful purposes forms the bedrock of the existing international
legal regime.

Following the launch of the first satellite, Sputnik,
into orbit in 1957, the United Nations established its Committee on
the Peaceful Uses of Outer Space
("COPUOS") and COPUOS created two
different sub-committees: a scientific and technical sub-committee;
and a legal sub-committee.

COPUOUS has been instrumental in negotiating five international
treaties covering space, namely:

the 1967 Treaty on Principles
Governing the Activities of States in the Exploration and Use of
Outer Space, including the Moon and Other Celestial Bodies (the
"Outer Space Treaty");

the 1968 Agreement on the Rescue of
Astronauts, the Return of Astronauts and the Return of Objects
Launched into Outer Space (the "Rescue
Agreement");

the 1972 Convention on International
Liability for Damage Caused by Space Objects (the
"Liability Convention");

the 1975 Convention on Registration
of Objects Launched into Outer Space (the
"Registration Convention"); and

the 1979 Agreement Governing the
Activities of States on the Moon and Other Celestial Bodies (the
"Moon Treaty").

The Outer Space Treaty broadly, forms the basis of international
space law, with 107 ratifications and 23 other signatories as of
October 2018. It basically prevents states from putting weapons of
mass destruction into space or installing them on the moon or any
other celestial body. It exclusively limits use of the moon for
peaceful purposes. Interestingly, it does not prevent the putting
of conventional weapons into space.

The Outer Space Treaty also prevents states from making territorial
claims to the moon or other celestial bodies and maintains that
space shall be free and for the use and exploration by all states.
Interestingly, the question of who owns resources that may
one day be mined from the moon (or other celestial bodies) is a
separate one.

The Rescue Convention basically requires signatory states to
provide all possible assistance to recover space objects and
astronauts that may come down within its territory, at the cost of
the state that launched it. Some commentators suggest that it needs
to be amended when commercial operations putting humans into space
commences, extending the definition of astronaut to
include passengers.

The Liability Convention sets out the principle that states bear
responsibility for space objects launched from their territory.
Regardless of who launches the space object, the state from which
it was launched is liable for damage caused by it, though there are
exceptions to this principle, where two or more states work
together. In such circumstance, they are jointly and severally
liable. Note further that claims under the Liability Convention are
inter-state (and individuals have no separate legal
standing). To date, there has been just one claim under the
Liability Convention, in relation to the 1978 crash of the Russian
satellite, Kosmos 954 in Canadian territory.

The Registration Convention requires states to provide
information about the orbit of each object put into space, in
addition to the general function of the space object.

Interestingly, the Moon Treaty, which attempted to establish a
global commons regime (similar to the UN Convention on the
Law of the Sea), has just 18 signatories, and no country that
potentially has the capability to undertake activities on the moon
or other celestial bodies, is a signatory.

The UN Office of Outer Space Affairs
("UNOOSA") is the body responsible for
promoting international cooperation for the peaceful use of space.
UNOOSA essentially serves as a secretariat for the COPUOS and
maintains the register of objects launched into space, amongst
other things.

Generally, it's probably fair to say that the existing
international legal framework is a broad brushed statement of
principle and it does not really address particular nuanced legal
questions related to particular activities. When the mining of
celestial bodies becomes a practicality, we are likely to see a
top-down international convention with a regime not too
dissimilar to the UN Convention on the Law of the Sea. Otherwise,
we could see a bottom-up approach, between private and
public sector actors, mapping out a regime of rights and
responsibilities and revenue sharing.

5. DOMESTIC LAW

Notwithstanding the international law on the subject, many
states have also developed their own municipal law, providing
greater clarity in relation to the relationship between the private
sector and the public sector in particular. Generally, such
legislation governs the launch and operation of objects that go
into space, regulations relating to the design and manufacture of
the technology that goes into space, the application of space
technology, exploration activities and research.

6. THE BILL

Turning back to the Bill and its contents, perhaps the first
thing to note about the Bill is that it is quite general and all
encompassing, perhaps symptomatic of all initial regulatory
attempts to get to grips with technological advancement and the
changes in society that it will bring about. To a certain extent,
the Bill takes the off-the-shelf model law solution8
prepared by the International Law Association, with local
customization for the Indian context.

On the one hand, it obviously acknowledges that the private
sector will play a crucial role in the future use of space to
develop and enhance human communications and other scientific
endeavors, having an impact on society. However, on the other hand,
it provides a great deal of discretion to the state to
control access to space. Nevertheless, the Bill clearly anticipates
a type of public-private partnership in the sector, with
government working in tandem with the private sector, to meet its
future strategic goals, with the ISRO inviting the private sector
to develop as many as 30 future satellites.

6.1 Definitions

The Bill defines "space activities"
very broadly to mean:

"the launch of any space object, use of space object,
operation, guidance and entry of space object into and from outer
space and all functions for performing the said activities
including the procurement of the objects for the said
purposes."

Clearly, this definition will capture almost everything in the
supply chain and care needs to be taken to prevent an
over-draconian limitation on the usage of materials or services
rendered in assembling components.

"space objects" are defined to
mean:

"(i)any object launched, or intended to be
launched on an orbital trajectory, around the earth or to a
destination beyond the earth orbit;

(ii)any device, the purpose of which is to launch
an object on a trajectory under sub clause (i), even when such a
device is operated without payload for the purpose of its
development and validation phase;

(iii)any constituent element of an object referred
to in sub-clause (i) and (ii)."

It's also interesting to note that "Commercial
Space Activity" is defined to mean:

"a space activity which generates or is capable of
generating revenue or profit."

The definitions raise a number of interesting questions.
Firstly, the definition of space object is so broad that
it would likely include all of the software and other technological
components of it, which raises the question as to whether the use
of services, such as GPS, by individuals using mobile phones would
be caught by it? Clearly, this would be an irrational
over-extension of the ambit of the Bill, though clarity needs to be
brought out.

Note that a "license" is defined
later on in the body of the Bill, as a license in relation to a
commercial space activity, though the operative drafting
leaves open many of the terms and conditions of the license and
what it actually might contain in practice. Nevertheless, it's
clear that a license will be required to carry out space
activity.

6.2 The regulatory mechanism

Chapter 2 of the Bill sets out a broad obligation on the Central
Government to put in place a mechanism through the framing of
policies for the use of outer space for peaceful purposes, and in
particular Section 3, specifies the duty to:

(a) develop a space activity plan, with established goals,
targets and principles,

(c) to provide technical and professional support and
authorization to launch a space object;

(d) regulate the procedures for conducting and operating space
activities;

(e) create and maintain a register of space objects;

(f) monitor conformity with international treaty
obligations;

(g) ensure safety;

(h) supervise the conduct of space activity where India is the
launching state for which a license has been granted;

(i) share access and potential benefits, including the pricing
mechanisms for products created by space activity and technology
with any person, or any agency in the manner as so prescribed;
and

(j) investigate accidents in connection with any space
activity.

While the regulatory, safety and registration of objects
launched into space, mirror general international requirements,
some of the other proposed regulatory mechanism raises a number of
interesting questions. In particular in relation to sub paragraph
(i) stated above. To what extent might this prejudice the private
sector's investment into any commercial space activity?

6.3 Powers of the government

Section 4 of the Bill grants broad powers to the Central
Government to inspect and investigate the space activity proposed
by licensee, together with the power to requisition data and
information in relation thereto. These are not unreasonable
requirements, though the private sector will no doubt want
assurances from government that any commercially sensitive
information remains confidential.

6.4 Granting of a license

The process for granting a license is yet to be developed, but
section 5 of the Bill envisages that there will be eligibility
criteria, and a fee to pay, without giving any detail or indication
as to what those criteria or fees might be. In particular, it sets
out the obligation to provide a financial guarantee or insurance,
which essentially addresses the broader liability question and the
principles of liability that flow under the international space
regime discussed in Section 4 (International Law)
above.

6.5 The License

The substantive provisions relating to the granting of a
license are set out in section 7 of the Bill. These
provisions are subject to fairly standard conditions relating to
public health and safety; and compliance with existing
international law is also included. Other conditions, including
grounds detrimental to the interests of India, public order,
decency and morality are also included. This is likely to be
contentious with private parties and in particular, foreign private
parties, in relation to subjective notions of decency and
morality.

How might an application for a license to launch satellites
beaming entertainment content that is more liberal in its
interpretation than the social mores prevailing in India
be treated? Furthermore, imagine a scenario in the future where
space activities might raise fundamental ethical questions? How
would experiments carried out in space that relate to controversial
biotechnology and genetics be treated? Should and would this be
permissible?

Section 8 of the draft Bill sets out further conditions in
relation to the contents of any license, requiring it to grant
unconditional permission to the Central Government to inspect any
space activity, examining and testing the licensee's facilities
and equipment and other aspects relating to the proposed space
activity, including its intent, purpose, orbit and consent for any
deviations.

The license is also required to contain provisions confirming that
the licensee's operations are in conformity with applicable
law, an obligation to insure the launch and the space object and
further, contain termination triggers for any breach of its
conditions. Licenses essentially will not be transferable by the
licensee, without the prior written approval by the Central
Government, which shouldn't come as any surprise.

Section 10 of the draft covers those circumstances where the
Central Government may suspend or revoke a license, including
non-compliance with the terms of the license, and a more
discretionary right to suspend or revoke if it is required in the
interests of public health, security, defense, public order and
perhaps potentially controversially (as discussed above) for
reasons of decency or morality. It should be noted however, that
the licensee has the opportunity to be heard by the Central
Government before any suspension or revocation of the license.

6.6 Registration & Liability

Section 11 of the draft Bill sets out the criteria in relation
to registration, and critically, Section 12 sets out an obligation
to indemnify the Central Government from any third party claim in
connection with damage or loss relating to a space activity or
space object. Interestingly, the quantum of the indemnity is to be
determined by the Central Government, in a manner to be prescribed
and it remains to be seen what the mechanism for determining the
quantum of liability will be, though it is unlikely to be
capped.

The obligation to indemnify stems from the international regime
that governs space law and the general principal that a launching
state is liable for damage caused by objects which it launches into
space. To the extent that the private sector launches from India,
the state will be primarily responsible under international law for
liability arising from accidents causing damage to another
state.

In this context, it will be interesting to see what type of
indemnity mechanism the central government will require from the
private sector and whether post launch bonds will be
required to be deposited, and if so, to what quantum will
those bonds need to be in order to mitigate risks and whether this
will be commercially possible for the private sector to bare.

Indemnities for damage caused by space objects launched by any
joint venture between the private sector and the public
sector will also have to be carefully scrutinized to ensure that
the private sector isn't wholly on the hook for such
liabilities.

6.7 Offences & Penalties

Section 13 of the Bill specifies the penalties for carrying out
space activities without a license, which are both criminal
(between one to three years in prison) and civil (a fine of no less
than INR 1 Crore (approximately USD 140,000) and for continuing
breach, a fine of INR 50 lakhs (approximately USD 70,000 per day).
For the offence of providing false information, the penalty is
potentially imprisonment for up to a year, and/or a fine of INR
50,000 (approximately USD 700).

Penalties for damage or pollution to the environment (be it on
earth, in space, or on a celestial body) through any space activity
include a jail term of between one and three years and a civil
liability of no less than INR 1 Crore (approximately USD
140,000).

Tucked away in section 20 of the Bill, the penalty for breaching
any direction of the Central Government could extend to a fine
between INR 1 to 50 Crore (between approximately USD 140,000 to USD
7,000,000).

The draft Bill further goes on to clarify that in the event that
a company breaches its obligations, the persons in charge of the
Company shall be liable, in addition to the company. This clearly
suggests that a director, manager, company secretary, or other
officer of the company will be criminally liable for a breach, in
addition to potentially receiving a fine. It should however, be
noted that a person may demonstrate that he had no knowledge of the
act, or that he demonstrated all due diligence to prevent the
commission of the offence.

6.8 Intellectual Property Rights

The intellectual property rights section of the draft Bill is
curious and is perhaps counter-intuitive to courting the private
sector to participate in space activities. Section 25 of the Bill
states that:

"Any invention, or other form of intellectual property
rights, developed, generated or created during the course of any
space activity shall be protected by any law for the time being in
force, with the primary objective of safe guarding national
security."

The provision goes on to say that: "Any form of
intellectual property right developed, generated or created on
board a space object in outer space shall be deemed to be the
property of the central government." This provision will
surely deter the potential participation of the private sector, and
in particular, in any future mission where an Indian launch puts a
foreign space object into space; or a joint Indian and
foreign mission that creates intellectual property in space.

6.9 Restriction on Disclosure

Interestingly, Section 17 of the draft Bill contains a wide
ranging provision for the Central Government to restrict a person
from disclosing information relating to space technology, systems,
operations, processes and procedures to any other person, and the
penalty for breach could potentially be a jail term of between 6
months to 2 years, together with a fine of between INR 50,000 to
INR 100,000.

The provision no doubt, aims to take into account a public
private partnership, and any leak by a private partner of
confidential material belonging to the public sector.
However, to what extent it relates to confidential information
provided by a private sector manufacturer of a space object in
relation to any license application (effectively acting as a
deterrent for any breach of confidentiality by the public sector)
remains to be seen.

6.10 Exclusion

Section 26 of the draft Bill sets out a provision stating that
the Central Government shall not be held accountable in relation to
anything done in good faith in pursuance of any space
activity. Broadly, this appears to provide the Central Government
immunity from suit on the grounds that good faith is
extremely subjective, potentially prejudicing private participation
and underlining the risk of claims by a private sector partner
against the public sector.

6.11 Expropriation

Section 30 of the draft Bill could be misconstrued as a thinly
disguised expropriation provision, permitting the Central
Government to take over the management, control or supervision of
any space object or any installation in relation thereto, for
whatever duration it deems fit on the grounds of war, external
aggression, a natural calamity, or, controversially, such other
eventuality as it may deem necessary. To what extent will this
apply to foreign satellites and other foreign private parties
engaging in any joint venture with an Indian party?

7. CONCLUSIONS

The draft Bill is a welcome starting point in the context of
building a regulatory framework for a future industry that is yet
to reach critical mass. Many of the provisions are perhaps
analogous to embryonic regimes governing the introduction of new
technology of the time (think the car, the plane and more recently,
the drone) and it's inevitable that such regimes will generally
set out a requirement to license entities to undertake certain
activities, with corresponding obligations to be observed so as to
not endanger the public at large.

Parallel domestic legislation in other major economies generally
contains provisions which give the state the discretion to refuse a
license for space activities if it would violate international law,
the health and safety of persons within the state concerned, or
otherwise, is a threat to national security.9 In this
context, many of the analogous provisions in the draft Bill are
perhaps no worse than general industry standard.

However, it's quite important that the government
doesn't overly regulate the sector to the extent that it will
potentially discourage the private sector from participating, or
otherwise, prejudice foreign participation (whether it be public or
private) in future space endeavors.

Care therefore needs to be taken in getting the balance
right, in particular in relation to intellectual property rights
for new products or services developed in space, or otherwise, the
rights to minerals or other substances mined from celestial bodies.
Put otherwise, if the private sector isn't equitably rewarded
for its innovation, the sector is unlikely to attract the
investment that it so critically needs.

A final point for reflection: following the coming into force of
any space law, the government will need to consider its stance on
foreign direct investment in related technologies, whether it be
launch technology, satellites or other vehicles that could
potentially be launched into space. The more permissive this regime
is, the more likely India will be able to attract capital and
investment into this sector to develop not just its own space
program, but essentially make India a hub for the international
space industry in general, developing launch and space vehicles and
their components in a potentially more cost effective manner.

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